Basic Cost$-$Volume$-$Profit Concepts

Klamath Company produces a single product. The projected income statement for the coming year is as follows:

Sales units @ $$39\mathrm{.}00)$

Total variable cost

Contribution margin

Total fixed cost

Operating income

$$2,094,300$

$670,176$

$$1,424,124$

$1,538,160$

$$(114,036)$

Required:

Compute the unit contribution margin and the units that must be sold to break even.

Unit contribution margin

Break$-$even units

$

Suppose $10,000$ units are sold above breakeven. What is the operating income?

$

Compute the contribution margin ratio. Use the contribution margin ratio to compute the break$-$even point in sales revenue.

Contribution margin ratio

Break$-$even sales revenue

units

Suppose $10,000$ units are sold above breakeven. What is the operating income?

Compute the contribution margin ratio. Use the contribution margin ratio to compute the break$-$even point in sales revenue.

Contribution margin ratio

Suppose that revenues are $$200,000$ more than expected for the coming year. What would the total operating income be$?$

$